Lemelson Capital Management Calls For Removal of Geospace Technologies (NASDAQ: GEOS) Senior Executives, Sale of Company

February 09, 2018
The Board of Directors

Geospace Technologies Corporation
7007 Pinemont Drive
Houston, Texas 77040
Dear Members of the Board of Directors:
Lemelson Capital Management LLC, as the beneficial owner of approximately 10 percent of

Geospace Technologies ("Geospace") outstanding shares, is calling for the immediate
removal, for cause, of Mr. Rick Wheeler, CEO and Mr. Tom McEntire, CFO. In addition,
Lemelson Capital Management, LLC, urges the board to contemporaneously explore a sale of
the company.
We do not undertake these recommendations lightly. We have been extremely troubled by

the following conduct of Messrs. Wheeler and McEntire, including but not limited to:
1. Knowingly filing a materially misleading form 8-K with the Securities and Exchange
Commission (SEC) on February 7, 2018;
2. Failure to design and maintain controls over the classification of inventory that has led
to adverse audit opinions and material weakness in the Company’s internal control
over financial reporting;
3. The dysfunction and incompetence being exhibited in the process of maximizing

stockholder value that the Board is purportedly "handling”, and which has led to the
loss of major contracts.
As a direct result of the failed management of Mr. Wheeler and Mr. McEntire, the stock price
of Geospace has recently hit a new 52-week low, (plummeting nearly 90 percent since Mr.
Wheeler took over as CEO in January 2014). This despite the extraordinary industry-wide
recovery in the oil and gas sector which has led to the stock price of several of the company’s
immediate competitors achieving new 52-week highs—which suggests that the poor
performance of the stock is not connected to any industry-wide factors but is specifically
linked to the management of Geospace.
www.lemelsoncapital.com
225 Cedar Hill Street, Ste 200 – Marlborough, MA 01752 - Tel. 508-630-2281
1
We are disturbed but not surprised by this mismanagement given the recent history of
strategic bungling by Mr. Wheeler and Mr. McEntire, which has been reported in our previous
letters. This has led to the recent loss of two major PRM contracts with Statoil, a key long-
standing customer. Moreover, those contracts were lost not to another industry leader but to
Nokia, an obscure provider with limited experience in the energy industry. The loss of these
contracts from Statoil (NYSE: STO), one of the world’s oil and gas majors, underscores the
failures of current management, and places at risk what should be a shoe-in win of the PRM
contract for Petrobas’ (NYSE: PBR) giant Roncador field expected in 2018 1.
We are not alone in our concerns. Other shareholders are now publicly questioning the
integrity and ability of Wheeler and McEntire.
As significant shareholders who take our fiduciary duties to investors seriously, we cannot
stand by silently as Geospace, a company with vast under-reported and unencumbered
assets, including near-record cash and liquidity, engages in a campaign of cash preservation
and cost cutting measures which make no business sense. Indeed, we can only conclude that
such efforts serve only to entrench Mr. Wheeler and Mr. McEntire and the current board while
massively disenfranchising public shareholders and permanently robbing us of the opportunity
to unlock the value of our stake in the company2.
As stewards of our assets you are charged with a duty to place stockholder interests above
personal gain or other motives. To allay the legitimate concerns and uncertainty now flooding
the marketplace and to provide much needed transparency, we ask that you immediately take
the following actions:
1. Correct the recently filed form 8-K to reflect the accurate tally of votes and make public
any correspondence or process in which Geospace invited or directed third parties to
make motions or alter the vote count (the "process letters") at the most recent annual
meeting.
2. Remove Mr. Wheeler and Mr. McEntire for clearly breaching their fiduciary
responsibilities to shareholders and for violating securities laws and regulations by
knowingly filing a false and materially misleading form 8-K on February 7, 2018.
3. Engage an investment bank to explore strategic alternatives for a sale of the

company.
We assume that Geospace as part of its corporate governance process at its most recent
annual meeting did not place any artificial restrictions on the proposals or voting rights that
1
Given the divestiture of PGS’s PRM business and the fact that Nokia is likely at full capacity, the loss of any of the 8
fields in the portfolio Petrobras has designated for PRM systems would be indefensible.
2
See “Lemelson Capital Management announces 10 percent stake in Geospace Technologies (NASDAQ: GEOS), urges
immediate share repurchase,” December 1, 2017(click here to access a copy).
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the Geospace board was willing to consider, such as discouraging, or even prohibiting the
accurate tally of votes cast at the meeting.
Of course, we appreciate the need for confidential correspondence, and therefore stockholders
need not know at this point who received the Process Letters. However, stockholders do need
to know that the board’s actions are consistent with their chief duty to maximize stockholder
value.
Additionally, Lemelson Capital does not seek and does not expect to receive material non-
public information and thus requests that you file such letters publicly with the Securities and
Exchange Commission via Form 8-K swiftly and deliberately.
Considering the serious concerns recently expressed by many Geospace stakeholders and
interested parties, undertaking these proposed actions is the only responsible thing to do.
Sincerely,
Rev. Fr. Emmanuel Lemelson
Chief Investment Officer

Lemelson Capital Management, LLC
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SPECIAL NOTE REGARDING THIS RELEASE
THIS REPORT INCLUDES INFORMATION BASED ON DATA FOUND IN FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, INDEPENDENT INDUSTRY PUBLICATIONS AND OTHER SOURCES. ALTHOUGH
WE BELIEVE THAT THE DATA IS RELIABLE, WE HAVE NOT SOUGHT, NOR HAVE WE RECEIVED, PERMISSION
FROM ANY THIRD-PARTY TO INCLUDE THEIR INFORMATION IN THIS PRESENTATION. MANY OF THE
STATEMENTS IN THIS PRESENTATION REFLECT OUR SUBJECTIVE BELIEF.
EMMANUEL LEMELSON’S VIEWS AND HIS HOLDINGS OF THE SECURITIES MENTIONED IN THIS RELEASE
COULD CHANGE AT ANY TIME. HE MAY SELL ANY OR ALL OF HIS HOLDINGS OR INCREASE HIS HOLDINGS
BY PURCHASING ADDITIONAL SECURITIES. HE MAY TAKE ANY OF THESE OR OTHER ACTIONS REGARDING
ANY OF SUCH SECURITIES WITHOUT UPDATING THIS RELEASE OR PROVIDING ANY NOTICE WHATSOEVER
OF ANY SUCH CHANGES.
THE INFORMATION CONTAINED ABOVE IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT
ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT
WHICH THE SECURITIES OF GEOSPACE TECHNOLOGIES MAY TRADE AT ANY TIME. THE INFORMATION AND
OPINIONS PROVIDED ABOVE SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY
INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN DECISIONS REGARDING GEOSPACE
TECHNOLOGIES AND ITS PROSPECTS BASED ON SUCH INVESTORS' OWN REVIEW OF PUBLICALLY
AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED ABOVE. NEITHER
LEMELSON CAPITAL MANAGEMENT, LLC NOR ANY OF ITS AFFILIATES ACCEPTS ANY LIABILITY
WHATSOEVER FOR ANY DIRECT OR CONSEQUENTIAL LOSS HOWSOEVER ARISING, DIRECTLY OR
INDIRECTLY, FROM ANY USE OF THE INFORMATION CONTAINED ABOVE.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this letter are forward-looking statements including, but not limited to,
statements that are predications of or indicate future events, trends, plans or objectives. Undue reliance
should not be placed on such statements because, by their nature, they are subject to known and
unknown risks and uncertainties. Forward-looking statements are not guarantees of future performance
or activities and are subject to many risks and uncertainties. Due to such risks and uncertainties, actual
events or results or actual performance may differ materially from those reflected or contemplated in
such forward-looking statements. Forward-looking statements can be identified by the use of the future
tense or other forward-looking words such as "believe," "expect," "anticipate," "intend," "plan,"
"estimate," "should," "may," "will," "objective," "projection," "forecast," "management believes,"
"continue," "strategy," "position" or the negative of those terms or other variations of them or by
comparable terminology. Important factors that could cause actual results to differ materially from the
expectations set forth in this letter include, among other things, the factors identified under the section
entitled "Risk Factors" in Geospace Technologies Annual Report on Form 10-K for the year ended
September 30, 2017. Such forward-looking statements should therefore be construed in light of such
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factors, and Lemelson Capital is under no obligation, and expressly disclaims any intention or obligation,
to update or revise any forward-looking statements, whether as a result of new information, future events
or otherwise, except as required by law.

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February 09, 2018

The Board of Directors

Dear Members of the Board of Directors:

Lemelson Capital Management LLC, as the beneficial owner of approximately 10 percent of

We do not undertake these recommendations lightly. We have been extremely troubled by

3. The dysfunction and incompetence being exhibited in the process of maximizing

3. Engage an investment bank to explore strategic alternatives for a sale of the

Rev. Fr. Emmanuel Lemelson

Chief Investment Officer

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